Tokenized assets are expected to expand into a US$16 trillion business opportunity by 2030 — making up 10% of global GDP by the end of the decade — from US$310 billion in 2022. This is according to a new report by global consulting firm BCG and the digital exchange for private markets ADDX.
See related article: How tokenization via blockchain can digitize assets and open up investment opportunities
Fast facts
- Growth in tokenized assets is expected in real estate, equities, bonds and investment funds as well as less traditional assets such as car fleets and patents, the report said.
- Tokenization and fractionalization lower barriers to investment in private markets by sharply reducing minimum lot sizes, the report said.
- The growth in tokenization of assets is due to many investors looking for greater access to private markets, according to the report.
- The BCG-ADDX report lists five indications that asset tokenization may be on the cusp of widespread global adoption. These include increased trading volume in tokenized assets, strengthening stakeholder sentiment across many countries, recognition among monetary authorities and regulators, more asset classes being tokenized and a growing pool of active developer talent in the blockchain space.
- The report comes as a growing band of financial institutions are exploring the technology. Singapore’s central bank has announced Project Guardian, a collaborative initiative with the financial industry to explore the economic potential and value-adding use cases of asset tokenization.
- In June, JPMorgan Chase & Co. blockchain business unit Onyx said it aims to bring trillions of dollars in tokenized assets to decentralized finance (DeFi).
See related article: How tokenization could transform Hong Kong’s fixed income markets